In The Media ⁽⁴⁰⁰⁾

Read full article Abstract: Sonia Gandhi has chosen two men to India's top office — they are a study in contrasts. Since the death of Prime Minister Rajiv Gandhi, Sonia Gandhi has had the opportunity to appoint two of India's prime ministers. Superficially similar, her two choices make an interesting study in contrasts. In May 1991, following the assassination of Rajiv by a Tamil suicide bomber in the midst of an election campaign, the choice of the next Congress president fell upon the shoulders of Sonia. Because the assassination had tilted the odds of election outcome greatly in favour of Congress, her choice was expected to be the next prime minister of India.

Read full article Abstract: In a recent article on this page (December 3), finance minister P Chidambaram enumerated the achievements of his government as well as his own. No doubt, he deserves much credit for facing head on many challenges he inherited from his predecessor. Rapid growth and concomitant rise in revenues have led to a build up of huge appetite for spending in most ministries in recent years. The recent sharp decline in growth, which arrested growth in revenues, did not curb this appetite. Consequently, the task of playing the bad cop to contain fiscal deficit fell squarely on the FM's shoulders.

Investment in human capital is likely to fail to translate into effective growth if incentives for entrepreneurs are missing Read full article It has been asserted that India neglected education, especially at the elementary level, investing too little in it in the early post-Independence decades. It is additionally claimed that the low investment in education was the reason India grew slowly during those decades. Are these critics right? One way to highlight the difficulty of achieving high per capita expenditures on education during the early decades is to ask what it would have taken to achieve the current level of per capita expenditures on education. In 2008-09, the latest year for which such an estimate is readily available (see graph), expenditure on education by all departments in the central and state governments amounted to 3.8 per cent of gross domestic product (GDP). Assuming the same proportionate expenditure in 2012-13 and recognising that per capita income that year was 5.8 times that in 1950-51, it would have taken a whopping 22 per cent (5.8 times 3.8) of GDP in the latter…

Read full article Abstract: Dear Mr Rahul Gandhi, According to newspaper reports, you have recently asked Indian industrialists why we should have to import rakhis and Ganeshas from China. While many in social media have made light of your remark, i could not be happier that a leading figure from the ruling party has posed this question to India's top industrialists. In my understanding, rakhis and Ganeshas in your question are metaphors for labour-intensive manufactures that began to flow into India from China soon after the import licensing on consumer goods was terminated in 2001. But with a workforce of almost half billion and significantly lower per-capita income, we should not be outcompeted in labour-intensive manufactures by China in either the domestic or world market.

The author compares Mr Modi in Gujarat to the Congress in India Read full article Abstract: With the bid by Gujarat Chief Minister Narendra Modi for the office of the prime minister of India in full swing, attacks on the Gujarat story have intensified. Given the narrowing of the contest to one between Mr Modi and the Congress, one would expect the critics to compare the accomplishments of the former in Gujarat to the latter's nationally. But no critic would hazard such a comparison. The data leave little room for anyone to credibly question the superior performance of Gujarat in industrialisation, agricultural development and overall growth. Therefore, critics have invented the argument that thanks to its long-standing entrepreneurial tradition, Gujarat has always grown fast. But if so, why is Rajasthan not a growth powerhouse despite its legendary Marwari entrepreneurs? Attracted by the superior business environment, those entrepreneurs have in fact migrated to Gujarat. The claim that Gujarat has always grown fast also turns out to be false. A recent study by economists Archana Dholakia and Ravindra Dholakia shows that the…